Summary

In this chapter, you have learned some of the basic techniques of statement analysis, including variance analysis and common-sizing according to bases such as revenues, total assets, and headcount.

These are global techniques: that is, the results can serve to direct your attention to obstacles to your company's profitability, but they do not provide you as much specific information about problems as you might want. Chapter 7 discusses the particular ratios that you often want to calculate to obtain highly targeted information about your company's profitability and overall financial condition.